diff --git a/src/Documentation/sidebar.json b/src/Documentation/sidebar.json
index d5de105372..cd4cf6902e 100644
--- a/src/Documentation/sidebar.json
+++ b/src/Documentation/sidebar.json
@@ -132,6 +132,17 @@
       {
         "label": "Anonymized Usage Analytics",
         "slug": "analytics"
+      },
+      {
+        "label": "How To",
+        "slug": "howto",
+        "source": "howto/index.md",
+        "children": [
+          {
+            "label": "External Data and Cache",
+            "slug": "external-data-and-cache"
+          }
+        ]
       }
     ]
   },
diff --git a/static/docs/user-guide/howto/external-data-and-cache.md b/static/docs/user-guide/howto/external-data-and-cache.md
new file mode 100644
index 0000000000..48cae3581c
--- /dev/null
+++ b/static/docs/user-guide/howto/external-data-and-cache.md
@@ -0,0 +1,151 @@
+# Keep Data and Cache Outside the Project
+
+Sometimes we would like to keep the data and cache outside the project
+directory, so that we can search easily the code of the project.
+
+Keeping the data outside of the project, on a fixed absolute path, is also
+useful in case that there are several projects that use the same data.
+
+Another case when this would be desirable is if we want to keep the data on an
+[external drive](https://whatis.techtarget.com/definition/external-hard-drive)
+because they are too big to fit on our home directory, or for some other
+reasons.
+
+> A similar case is also when the data is on a
+> [network-attached storage (NAS)](https://searchstorage.techtarget.com/definition/network-attached-storage)
+> and is mounted through NFS, SSHFS, Samba, etc. However, in this case the data
+> is most probably used by a team of people, so make sure to check also the
+> guide about sharing data with a
+> [mounted DVC storage](/doc/user-guide/data-sharing/mounted-storage).
+
+## Make the data directory accessible
+
+Let's assume that the data of our project is located on `/data/project1/`. First
+we have to make sure that we can read and write the `/data/` directory:
+
+```dvc
+$ sudo chown <username>: -R /data/
+```
+
+> For Windows refer to
+> [User Account Control](https://docs.microsoft.com/en-us/windows/security/identity-protection/user-account-control/user-account-control-overview)
+
+## Setup an external cache
+
+An [external cache](/doc/user-guide/managing-external-data) resides outside of
+the workspace directory. Let's create a directory for it:
+
+```dvc
+$ sudo mkdir -p /data/dvc-cache
+$ sudo chown <username>: -R /data/dvc-cache
+```
+
+Now we can configure the project to use this external directory as
+<abbr>cache</abbr>:
+
+```dvc
+$ cd ~/project1/
+$ dvc config cache.dir /data/dvc-cache
+$ cat .dvc/config
+[cache]
+dir = /data/dvc-cache
+```
+
+Commit changes to git:
+
+```dvc
+$ git add .dvc/config
+$ git commit -m 'Setup external cache directory'
+```
+
+<details>
+
+### Preseve the content of the old cache directory
+
+If the default cache directory of the project (`.dvc/cache/`) is not empty, we
+can preserve its content by moving it to the external directory:
+
+```dvc
+$ mv -a .dvc/cache/* /data/dvc-cache/
+$ rm -rf .dvc/cache/
+```
+
+</details>
+
+## Track external dependencies and outputs
+
+Now, when you refer to the data files and directories in DVC commands, you'll
+have to **use their absolute path**. <abbr>DVC-files</abbr> will be created in
+the <abbr>project</abbr>, and you can track their modifications with Git as
+usual.
+
+For example, let's say that the raw data files are in `/data/project1/raw/`, and
+you are cleaning them up. You could do it like this:
+
+```dvc
+$ dvc add /data/project1/raw
+...
+$ dvc run \
+      -f clean.dvc \
+      -d /data/project1/raw \
+      -o /data/project1/clean \
+      ./cleanup.py \
+          /data/project1/raw \
+          /data/project1/clean
+```
+
+If you check the contents of `raw.dvc` (and `clean.dvc`) you'll notice that the
+`path` field refers to the external directories:
+
+```yaml
+md5: 9cbbacd47133debf91dcb41891c64730
+wdir: .
+outs:
+  - md5: 0ee0a6bc0a1f1be0610f7a3f67f1cb54.dir
+    path: /data/project1/raw
+    cache: true
+    metric: false
+    persist: false
+```
+
+You can also check and verify that indeed all the data and cache files are
+stored on the external directory:
+
+```dvc
+$ ls /data/
+dvc-cache  project1
+
+$ ls /data/project1/
+clean  raw
+
+$ ls /data/dvc-cache/
+...
+```
+
+<details>
+
+### Optimize data management
+
+Since we're talking about large data, it's worth spending some time to
+understand how DVC can
+[optimize data management](/doc/user-guide/large-dataset-optimization), so that
+it does not create unnecessary copies of large data.
+
+In short, if the partition where `/data/` is located is formatted with XFS,
+Btrfs, ZFS, or any other deduplicating file system (that supports _reflinks_),
+DVC will automatically use the most efficient way of handling large datasets,
+without custom configuration.
+
+If reflinks are not available, then you should consider setting the cache type
+to _symlink_ or _hardlink_, like this:
+
+```dvc
+$ dvc config cache.type "reflink,symlink,hardlink,copy"
+$ dvc config cache.protected true
+```
+
+However this implies that, for data files that are added to the project with
+`dvc add <datafile>`, you may need to run `dvc unprotect <datafile>` before
+modifying them. For more details, refer to `dvc unprotect`.
+
+</details>
diff --git a/static/docs/user-guide/howto/index.md b/static/docs/user-guide/howto/index.md
new file mode 100644
index 0000000000..934d014feb
--- /dev/null
+++ b/static/docs/user-guide/howto/index.md
@@ -0,0 +1,3 @@
+# How To
+
+- [Keep Data and Cache Outside the Project](/doc/user-guide/howto/external-data-and-cache)